Tel Aviv exchange rises amid worldwide optimism over France vote

The Israeli stock market rose on Monday after moderate Emmanuel Macron won the first round in France’s presidential election and looked set to triumph in the runoff against far-right candidate Marine Le Pen next month.

The Tel Aviv 35 Index is up 1.32% and the TA-All Share is up 0.94% following positive market shifts in Europe and East Asia.

Investors globally had been watching the vote fearing that a wave of populism, which swept Donald Trump to the White House and saw Britain leave the EU, could lead to a win for the anti-European Le Pen and put the future of the bloc and its unified currency in doubt.

Macron, who has promised to protect the European unification project, is widely expected to gallop to victory over the Front National leader, causing traders to give a huge thumbs-up and sending the euro flying above $1.09 at one point before paring the gains to $1.0846 from $1.0726 in New York on Friday. It also jumped to 119.40 yen from 117.07 yen.

However Israel’s Yaniv Hevron, chief economist of Excellence Investment House, cautioned against being too optimistic.

“We are already seeing European markets function better, without obstructions,” he said. “All the same, even though the trend in the next few days is likely to be positive, investors are recommended not to become dazzled by that. The risk on the stock markets will still be with us for at least a couple of weeks,” Hevron said, according to the business journal Globes.

“The European market has been our preference since the end of last year, as it is much more attractive than the American market from the point of view of its upside, outlook for profits and pricing,” Hevron said. “In the coming period it will behave much better, without political uncertainty and without the fear of the breakup of the European Union. A combination of factors will also support a strengthening of the euro.”

AFP contributed to this report.